Mixed-use properties are becoming the go-to opportunity for many developers and investors in and around Downtown Albuquerque.
Many Albuquerque developers either have mixed-use projects that are opening soon, rising on construction sites or teeing up. They are so prevalent these days that NAIOP New Mexico, the commercial real estate development association, recently hosted a panel discussion featuring some of the more active players.
Several of the NAIOP speakers laid out a rosy vision of building mixed-use properties with hundreds of new rental apartments Downtown – living spaces offering vibrant designs and unique amenities, and primarily tailored to millennials and baby boomers. These future renters, they asserted with the highest of hopes, are eager to ditch their cars to “live, work and play” in walkable, transit-accessible neighborhoods, with merchants on the ground floor eager to sell them coffee, food and entertainment.
One mixed-use project, which will soon take shape along Central across from Presbyterian Hospital, is clearly on steroids when one considers its size, expense and future economic impact.
“Mixed-use projects are an expression of the (development) industry adapting to changes in the culture – especially the ways some of us now work, live and buy,” said Steve Maestas, a prominent leader in the town’s commercial real estate sector. His company, Maestas Development Group, is teaming on a privately funded $100 million project called The Highlands with Titan Development and Alliance Residential.
The first two of six planned phases will be The Broadstone Highlands, a 92-unit apartment building, and a Marriott Springhill Suites Hotel. Also on the drawing board is a second Broadstone apartment community, with 228 units. In the conceptual stages are a food hall called Highlands Central Market, other retail tenants and a skybridge linking The Highlands development to Presbyterian.
Presbyterian, which sees 5,000 hospital employees, visitors and vendors each day, will be a big draw for the future apartment dwellers, retailers and food purveyors at the revitalized 12-acre site. “Our charge from Presbyterian (which is also a partner in the enterprise) is to create uses that will eliminate car trips to the (already congested) campus,” said Kurt Browning, Titan’s chief development officer.
“The whole idea is to create a future neighborhood on the order of Nob Hill and EDo,” east of Downtown, Browning said.
The partnership expects to break ground on the project this fall, and buildout is estimated to be completed in the next five years. Browning said 1,150 construction jobs and 425 permanent jobs will be created for the five-block development.
“The whole corridor (along Central) is going to look so much different five to 10 years out,” Maestas said.
Joining forces with Titan and Alliance helps spread the financial risk, said Maestas, whose company separately owns and operates Las Estancias, a massive commercial development in the South Valley. He said food and beverage purveyors, much like his Las Estancias development, will be a strong focus at The Highlands.
“Food and beverages are that experiential component that a lot of retail operators are missing,” Maestas said. “Pre-recession, 8 percent of the retail footprint (in the U.S.) was food-oriented. It’s now 16 to 17 percent and could be as high 25 percent by the end of the decade.”
Help from public entities
Many of the recent and future mixed-use projects are centered on or near the Central and Lomas corridors, and several would probably not have gotten off the ground without some help from city, county and other public entities.
A public-private partnership jump-started the $19.3 million mixed-use Imperial Building at Second and Silver SW, which in 2015 brought Downtown a long-sought-after new grocery store, new eateries and apartments. Geltmore LLC and YES Housing developed Imperial with a boost from the city, which contributed $4.4 million (including the land) and low-income housing tax credits. The project also received county and federal incentives.
It was a similar story for One Central, which is coming to life at First and Central. The city kicked in $17 million – most of it coming from lodgers’ taxes – plus land valued at $1.4 million, accounting for just under $19 million of the $35 million mixed-use project. Bernalillo County also approved an industrial revenue bond package that includes property and gross receipts tax breaks.
The project, which broke ground in January 2017, was created in response to the city’s request for proposals for a Downtown “entertainment district” to include restaurant and retail or entertainment businesses.
So far, the six-story steel and concrete structure features 68 studio, one- and two-bedroom apartments, which are leasing for August move-ins, and a 420-space parking garage.
Mosher has long indicated the project would likely involve a bowling alley but has yet to find an operator. Presumably it will have enough sound proofing to not disturb the renters on the top three floors. Meanwhile, he’s in discussions with other potential commercial tenants including a coffee bar and bakery, a brewery and a deli.
Multiple projects
Some of the other notable projects around town include:
• El Vado Place, an $18 million project that includes nearly $3 million from the city of Albuquerque, is nearly completed after transforming a long-closed Route 66 motor lodge into a boutique motel, event center, amphitheater, the town’s second Ponderosa Brewing taproom and food pods. The project also includes the 42-unit El Vado Place apartments, with both market rate and Section 8-eligible rentals.
• The $8 million DeAnza Motor Lodge which will get new life in about a year as a mixed-use project. The city previously owned the land and the derelict structures. A development group called Anthea at Nob Hill LLC, which includes Albuquerque-based companies TLC Plumbing and Utility and HB Construction, bought DeAnza in late 2017 for an undisclosed price from the Metropolitan Redevelopment Agency. The development along Central will include a boutique hotel, an extended stay hotel, upscale apartments, full-service restaurants, retail and office spaces.
• The $4.5 million Zocalo Lofts mixed-used project, which is being built in the 500 block of Fourth Street in the Barelas neighborhood. The 14,000-square-foot residential component is composed of 21 market-rate studio, one-, two- and three-bedroom apartments. Another 10,000 square feet will be devoted to retail space.
• Elevate @ 3rd and Lomas is envisioned as an infill mixed-use project with ground-floor retail space, upper-floor office space and 170 apartments, according to Scott Throckmorton of Argus Investment Realty. Cost estimates and other details are pending from Argus, which, with several equity partners, is also behind the Bank of the West Center redevelopment nearby.
• Glorietta Station is a planned redevelopment of an 8-acre site, including a five-story building, at Lomas and Broadway. Proposed by the Garcia family, which owns several auto dealerships, the mixed-use development would include a restaurant, marketplace, gallery and workspace, along with a distillery. No cost estimates have been disclosed.
• Silver Avenue Flats, a $24 million, five-story project with 132 high-end apartments and commercial/retail space. The development timeline suggests a summer 2019 completion date. Development principals are CBRE Albuquerque executives Tom Jenkins and Erik Olson. They’re seeking city assistance to defray development costs and fees and abatement of gross receipts taxes for construction costs.
With all these ambitious-sounding developments hitting the market over the course of several years, one might wonder if there are enough future rental and commercial tenants – and a strong enough economy – to sustain them all. Asked if he’s worried about any of them canceling each other out, developer Jerry Mosher was not the least concerned.
“I think we’re are going to be like McDonald’s and Wendy’s,” he said. “I think we’ll feed off each other.”
By: Steve Sinovic (ABQ Journal)
Click here to view source article.
